THE provincial government of Occidental Mindoro does not have enough net cash available to cover more than half a billion in obligations incurred as of 2019, government auditors said.
Government auditors said the province has P336.164 million cash available but its current obligations amounted to P547.822 million.
“Evaluation and verification of accounts in the financial statements and supporting schedules for the CY 2019 revealed that the total net cash available …was insufficient to cover payment of its current obligations and reserves totaling P547,822,376.20,” the COA said.
The audit team said the situation implies that the resources of the provincial government of Occidental Mindoro “was not effectively managed and utilized.”
A breakdown of the obligations of the province showed P132.97 million in accounts payable for goods and services; P46.1 million as salaries and benefits for provincial personnel; P20.08 million as payable to the Bureau of Internal Revenue, the Philippine Health Insurance Corporation and Housing Development Mutual Fund and P263.32 million as “due to national government agencies” representing on-going and completed projects.
“With this financial position, the reputation and credit standing of the Province could be adversely affected, may face the risk of legal suit from creditors for unpaid obligations and may affect the timely delivery of basic services,” the COA warned.
It recommended that the provincial officials provide a satisfactory explanation why the local government incurred obligations in excess of available cash and to adopt measures to increase collection efficiency to improve financial footing.
The provincial government explained that it inherited the accumulated deficiencies from the previous administration.
It assured the COA that steps have been taken to improve fiscal management through controlled disbursements, observance of the Government Procurement Reform Law (RA 9184), policy-based budgeting, and limited grant of cash advance for urgent expenditures.